Inventory methods in order to minimize raw materials at the inventory level in the supply chain (original) (raw)

Inventory Optimization as a Business Advantage

2016

This thesis addresses the performance optimization of supply chain network for a chemical company that has the manufacturing base in Europe and serves the customers of the Latin America region. In this sense, the overall target of this project is to enable the business to take robust decisions on how much and where to place inventories that would provide a business advantage both in financial terms and long term sustainability. Moreover, the research work in this document will be utilized in a key value chain of a pilot business unit within the sponsor company. With an objective to achieve the right balance between net working capital and speed of response, this thesis studies the interactions between various factors that affect the safety stock and inventory placement. The scope of the work includes studying the segmentation strategy, optimizing the inventory policy and validating the benefits of modifying the supply chain network configuration. In order to tackle the business prob...

Inventory Management Techniques: Optimizing Plant Operation in a Manufacturing Industry

International Journal of Computer Engineering in Research Trends, 2018

The main objective of this paper was to study the inventory management techniques and analyze the pros and cons of the existing technique and if needed, suggest a better-suited technique. The paper also sketches a background on the various costs involved and general inventory management techniques followed. The study uses a descriptive research design. The area of the study was a mechanical industry which produces valves, located in Chennai which is located in the Ambattur Industrial Estate. The inputs from the respondents were collected using a questionnaire and an interview guide. Secondary information was collected from different sources like; textbooks, internet, newspapers, magazines, and journals. The researchers obtained information from the staff and some clients who order directly from its premises. The sample size consisted of 50 respondents. The gender and age compositions of the respondents were established to eliminate any bias, in case of any. The results from the questionnaires and personal interviews were tabulated and analyzed and a relationship between the inventory management technique employed and performance was established based on the opinions of the respondents. A majority of the respondents agreed to positive relationship between the technique and performance of the company. A few respondents indicated inventory management as having a negative relationship on the performance. These same respondents believed that, inventory management involves a lot of costs, inconsistency as there is overcharging of customers, use of highly skilled workers in charge of managing inventories, theft, obsolescence among others all of which increase on the costs hence reducing much of the on the performance of the organization in question especially in the production department.

The role of inventory in the supply chain

2008

Lanţul logistic este un sistem coordonat de organizaţii, oameni, activităţi, informaţii şi resurse implicate în mişcarea unui produs într-o manieră fizică sau virtuală de la furnizor la client. Activităţile din lanţul logistic transformă materiile prime şi componentele într-un produs care este livrat către consumator sau utilizator. Activitatea de stocare, alături de transport şi de localizarea spaţiilor de producţie sau a depozitelor, reprezintă un factor important care influenţează performanţa lanţului logistic. Stocul cuprinde materiile prime, munca în curs, şi toate produsele finite din cadrul unui lanţ logistic. Schimbarea politicilor de stocare poate duce la modificarea dramatică a eficienţei şi receptivităţii lanţului logistic. Managerii firmelor care fac parte dintr-un lanţ logistic trebuie să identifice principalele categorii de stocuri şi modul în care acestea pot fi dimensionate. La nivelul fiecărei firme se pot identifica stocuri curente, stocuri sezoniere şi stocuri de siguranţă şi se pot calcula o serie de indicatori care pot oferi o imagine a activităţii de stocare. În mod tradiţional, managementul stocurilor reprezintă o provocare deoarece are un impact direct atât asupra costurilor, cât şi asupra nivelului de serviciu. Variaţiile neprevăzute ale cererii şi ofertei conduc la necesitatea menţinerii stocurilor în diferite verigi ale lanţului logistic pentru a răspunde nevoilor clienţilor. În consecinţă, creşterea stocurilor în lanţul logistic va duce la creşterea nivelului de serviciu şi la sporirea veniturilor, dar şi la mărirea costurilor. Cuvinte cheie: •lanţ logistic, •stoc curent, •stoc de siguranţă, • stoc sezonier, •metode de stocare Clasificare JEL: D20, D30, M10

Inventory Management Practices and its Effects on Vendor Managed Inventory Performance

The Vendor Managed Inventory (VMI) has long been implemented by many corporations due to its various positive effects it has towards the company's performance. At the same time, a number of success stories of VMI program have also been discussed by numerous authors. However, until now, there is no concrete conclusion on VMI has been clarified. Therefore, this study tries to shed the lights on the effects of inventory management practices, which include visibility of demand, replenishment decision, inventory ownership, inventory location, and inventory control limits on VMI performance. Quantitative methodology was chosen as the method to gather the data where those manufacturing companies being selected according to the list from the Federation of Malaysian Manufacturer (FMM). The data was gathered from 101 manufacturing companies whose manufacturing based located in Malaysia. Data analysis was conducted by employing descriptive analysis, factor analysis, reliability analysis, and a simple multiple regressions. The findings showed that visibility of demand and inventory control limits were the main predictor of service performance. Meanwhile, only inventory location contributes to cost performance of VMI. Manufacturing companies should urge their customer to share demand information and setting appropriate min-max limits of inventory levels in order to get benefits from VMI program. It was suggested for companies to consider to setup inventory storage or warehouse near to their customer's premises especially when engaging with abroad customers.

Analysis of vendor managed inventory practices for greater supply chain performance

International Journal of Logistics Economics and Globalisation, 2010

For a globalised supply chain to be responsive, the firm should have the ability to meet short lead times, respond to wide ranges of quantities demanded, handle a large variety of products, build highly innovative products and meet a very high service level. Vendor managed inventory (VMI) is one such supply chain practice where the vendor is given the sole responsibility to monitor and manage the inventory of the retailer. This paper attempts to analyse this supply chain practice and illustrate the key elements of this system and the role it plays in the overall supply chain. The benefits and risks of the VMI system are also analysed. The design and implementation steps for this supply chain practice are extensively reviewed. The analysis of industries which would benefit from implementing this system is also conducted. An investigation is attempted to see if any industries in the UAE are using VMI.

Inventory management and cost efficiency

International Journal of Research in Business and Social Science (2147- 4478), 2021

This research aims to observe current inventory management applied by one of the medical equipment distributors specializing in eye health devices, and provide recommendations for an optimal inventory management system to achieve cost efficiency afterward. The method used in this research is quantitative, focusing on processing and analyzing numerical data obtained from the company to calculate safety stock and the number of orders. In addition, ABC classification is also used in data processing to group items based on their value. Items belonging to class A (having a value of 80% for the company) will be used in the data processing. The next step is to conduct forecasting simulations for demand forecasts. The results of the forecast will be used for calculating the safety stock and order quantity. The output from the results of data processing and analysis in this study shows 67 items included in class A, which will then be processed using Minitab software for forecasting. Based on...

Optimizing Inventory Management Cost: Case of Simap

STATISTICS, COMPUTING AND INTERDISCIPLINARY RESEARCH

Inventory management is an important phase of total quality control. The surgical instruments manufacturing industry is one of the export-oriented sectors in Pakistan; there is a need to improve its business operations. This study focuses on comparison of eight techniques for the inventory management; data for 12 months was curated in 2017, from 75 firms operating in Sialkot. Statistical analysis was conducted to compare the following eight inventory management techniques: Lot for Lot, Wagner-Whitin, Least Unit Cost, Least Total Cost, Silver-Meal, Economic Order Quantity, Periodic Order Quantity, and Part Period Balancing. The Lot for Lot, Least Unit Cost, Least Total Cost, Sliver-Meal, and Wagner-Whiten, were found better than Economic Order Quantity, Periodic Order Quantity, and Part Period Balancing; Periodic Order Quantity is better than Economic Order Quantity which in turn is better than Part Period Balancing. One must keep in mind that statistical out-performance of one techn...

International Journal of Production Research Calculating the benefits of vendor managed inventory in a manufacturer-retailer system Calculating the benefits of vendor managed inventory in a manufacturer-retailer system

Firms such as Wal-Mart and Campbell's Soup have successfully implemented vendor managed inventory (VMI). Articles in the trade press and academic literature often begin with the premise that VMI is 'beneficial'; but beneficial to which party and under what conditions? We consider in this paper a vendor V that manufactures a particular product at a unique location. That item is sold to a single retailer, the customer C. Three cases are treated in detail: independent decision making (no agreement between the parties); VMI, whereby the supplier V initiates orders on behalf of C; and central decision making (both vendor and customer are controlled by the same corporate entity). Values of some cost parameters may vary between the three cases and each case may cause a different actor to be responsible for particular expenses. Under a constant demand rate, optimal solutions are obtained analytically for the customer's order quantity, the vendor's production quantity, hence the parties' individual and total costs in the three cases. Inequalities are obtained to delineate those situations in which VMI is beneficial.

Review of Modern Inventory Management Techniques

The paper provides a useful summary of the major inventory management techniques based on a recent review of the literature in the field and interviews with management teachers and practitioners. Research in the field generally tends to treat the emerging approaches techniques in silos; few academic papers have attempted to undertake a holistic review of the several key emerging techniques available to today's practitioner.Twelve pivotal inventory management techniques emerged from the present study. The essence and basic featuresof the identified emerging techniques for robust inventory managementare explained. The evolving business environment where cost management has become a key strategy to keep ahead of keen competition is highlighted. The paper concludes that the adoption of an appropriate combination of modern inventory management approaches can help practitioners to improve corporate service delivery in terms ensuring steady flow of materials while also minimizing the attendant carrying costs. The implications for management training and the scope for future research are presented at the end of the paper.